<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarter ended September 30, 1997 Commission file number 0-14403
BRUNSWICK BANCORP
(Exact Name of Registrant as Specified in its Charter)
NEW JERSEY 22-2610694
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification Number)
NEW BRUNSWICK, NEW JERSEY 08901
Address of principal executive offices) (Zip Code)
(732) 247-5800
(Registrant's Telephone Number Including Area Code)
NOT APPLICABLE
(Former Name, Former Address and Former Fiscal Year
if Changed Since Last Report)
COMMON STOCK, PAR VALUE $2.00 721,920 SHARES
(Class of Stock) (Outstanding at September 30, 1997)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X NO
<PAGE> 2
BRUNSWICK BANCORP AND SUBSIDIARIES
I N D E X
<TABLE>
<CAPTION>
P A G E
-------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996 1
Consolidated Statements of Income
Nine Months Ended September 30, 1997, 1996 and 1995 2
Consolidated Statements of Income
Quarters Ended September 30, 1997, 1996 and 1995 3
Consolidated Statements of Stockholders' Equity
Nine Months Ended September 30, 1997, 1996 and 1995 4
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997, 1996 and 1995 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations 8-9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
<PAGE> 3
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
SEP 30 DEC 31
1997 1996
------------ ------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 8,111,070 $ 9,190,838
Federal funds sold 24,800,000 20,100,000
Securities held to maturity 12,295,550 13,889,332
Loans receivable, net 50,285,886 52,853,869
Premises and equipment 991,703 924,433
Foreclosed real estate 72,192 3,577,329
Other assets 1,001,521 801,155
------------ ------------
TOTAL ASSETS $ 97,557,922 $101,336,956
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities:
Deposits:
Demand deposits $ 25,422,633 $ 25,622,228
NOW accounts 20,931,522 21,664,491
Savings deposits 12,290,277 13,757,450
Time deposits 18,615,950 20,753,960
------------ ------------
Total deposits 77,260,382 81,798,129
Borrowed funds 500,000 301,941
Accrued expenses and other liabilities 680,679 583,956
------------ ------------
Total liabilities 78,441,061 82,684,026
------------ ------------
Stockholders' equity:
Common stock, par value $2.00:
Authorized 3,000,000 shares;
issued 721,920 shares 1,443,840 1,443,840
Additional paid-in capital 4,284,804 4,284,804
Retained earnings 13,395,738 12,924,286
------------ ------------
19,124,382 18,652,930
Treasury stock at cost, 327 shares (7,521) --
------------ ------------
Total stockholders' equity 19,116,861 18,652,930
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 97,557,922 $101,336,956
============ ============
</TABLE>
1
<PAGE> 4
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $4,207,030 $3,791,718 $3,653,721
Interest on investment securities:
Taxable 790,771 638,166 1,016,257
Exempt from Federal income tax 5,560 8,441 11,045
Interest on Federal funds sold 779,785 866,174 788,141
---------- ---------- ----------
Total interest income 5,783,146 5,304,499 5,469,164
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 1,472,021 1,478,535 1,298,966
Interest on borrowed funds 10,462 10,178 17,419
---------- ---------- ----------
Total interest expense 1,482,483 1,488,713 1,316,385
---------- ---------- ----------
Net interest income 4,300,663 3,815,786 4,152,779
Provision for credit losses 435,000 350,000 350,000
---------- ---------- ----------
Net interest income after
provision for credit losses 3,865,663 3,465,786 3,802,779
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 652,540 539,586 636,552
Other non-interest income -- 55,824 1,500
---------- ---------- ----------
Total non-interest income 652,540 595,410 638,052
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 1,228,921 1,314,008 1,158,351
Employee benefits 331,894 322,282 228,671
Occupancy 545,551 503,422 450,521
Furniture and equipment 145,026 136,622 123,206
Loss on foreclosed real estate 398,681 -- --
Other non-interest expenses 987,319 872,235 1,360,978
---------- ---------- ----------
Total non-interest expenses 3,637,392 3,148,569 3,321,727
---------- ---------- ----------
Income before income taxes 880,811 912,627 1,119,104
Income tax expense 409,359 389,935 592,510
---------- ---------- ----------
NET INCOME $ 471,452 $ 522,692 $ 526,594
========== ========== ==========
NET INCOME PER SHARE $ .65 $ .72 $ .73
========== ========== ==========
</TABLE>
2
<PAGE> 5
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTERS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,379,179 $1,280,954 $1,218,292
Interest on investment securities:
Taxable 271,373 201,845 329,763
Exempt from Federal income tax 1,605 2,604 3,470
Interest on Federal funds sold 328,432 302,853 256,726
---------- ---------- ----------
Total interest income 1,980,589 1,788,256 1,808,251
---------- ---------- ----------
INTEREST EXPENSE:
Interest on deposits 504,093 511,369 451,457
Interest on borrowed funds 3,444 3,585 6,598
---------- ---------- ----------
Total interest expense 507,537 514,954 458,055
---------- ---------- ----------
Net interest income 1,473,052 1,273,302 1,350,196
Provision for credit losses 75,000 140,000 50,000
---------- ---------- ----------
Net interest income after
provision for credit losses 1,398,052 1,133,302 1,300,196
---------- ---------- ----------
NON-INTEREST INCOME:
Service fees 226,979 189,874 196,288
Other non-interest income -- 21,173 --
---------- ---------- ----------
Total non-interest income 226,979 211,047 196,288
---------- ---------- ----------
NON-INTEREST EXPENSES:
Salaries and wages 405,280 422,299 409,958
Employee benefits 104,487 98,807 72,217
Occupancy 222,770 161,792 151,032
Furniture and equipment 50,720 57,801 44,788
Loss on foreclosed real estate 398,681 -- --
Other non-interest expenses 377,574 279,998 461,537
---------- ---------- ----------
Total non-interest expenses 1,559,512 1,020,697 1,139,532
---------- ---------- ----------
Income before income taxes 65,519 323,652 356,952
Income tax expense 51,940 138,299 201,754
---------- ---------- ----------
NET INCOME $ 13,579 $ 185,353 $ 155,198
========== ========== ==========
NET INCOME PER SHARE $ .02 $ .25 $ .22
========== ========== ==========
</TABLE>
3
<PAGE> 6
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
COMMON RETAINED TREASURY
STOCK SURPLUS EARNINGS STOCK TOTAL
---------- ---------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C>
Balance
December 31, 1994 $1,203,540 $2,722,854 $12,812,629 $ -- $ 16,739,023
Net income -- -- 526,594 -- 526,594
---------- ---------- ----------- ------- ------------
Balance
Sept 30, 1995 $1,203,540 $2,722,854 $13,339,223 $ -- $ 17,265,617
========== ========== =========== ======= ============
Balance
December 31, 1995 $1,443,840 $4,284,804 $12,161,436 $ -- $ 17,890,080
Net income -- -- 522,692 -- 522,692
---------- ---------- ----------- ------- ------------
Balance
Sept 30, 1996 $1,443,840 $4,284,804 $12,684,128 $ -- $ 18,412,772
========== ========== =========== ======= ============
Balance
December 31, 1996 $1,443,840 $4,284,804 $12,924,286 $ -- $ 18,652,930
Net income -- -- 471,452 -- 471,452
Purchase of
treasury stock -- -- -- (7,521) (7,521)
---------- ---------- ----------- ------- ------------
Balance
September 30, 1997 $1,443,840 $4,284,804 $13,395,738 ($7,521) $ 19,116,861
========== ========== =========== ======= ============
</TABLE>
4
<PAGE> 7
BRUNSWICK BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
1997 1996 1995
------------ ----------- ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 471,452 $ 522,692 $ 526,594
Adjustments to reconcile net
income to cash provided by
operating activities:
Provision for credit losses 435,000 350,000 350,000
Depreciation and amortization 104,437 86,440 71,717
Net accretion of securities (34,642) (58,820) (450,117)
discounts
Loss on sale of foreclosed real
estate (398,681) -- --
Increase (decrease) in interest
receivable and other assets (200,366) 276,501 241,726
Increase (decrease) in interest
payable and other liabilities 96,723 39,402 269,314
------------ ----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 473,923 1,216,215 1,009,234
------------ ----------- ------------
INVESTING ACTIVITIES:
Net decrease in
Federal funds sold (4,700,000) 2,900,000 4,300,000
Proceeds from maturities of
investment securities 12,000,000 7,000,000 13,000,000
Return of capital on invest-
ment securities 4,140,724 218,890 157,199
Purchase of investment
securities (14,512,300) (6,965,000) (5,005,465)
Net (increase) decrease in loans 2,132,983 (5,122,394) 2,763,225
Proceeds from sale of foreclosed
real estate 3,903,818 -- --
Capital acquisitions (171,707) (256,400) --
Purchase of treasury stock (7,521) -- --
------------ ----------- ------------
NET CASH PROVIDED BY (USED
IN) INVESTING ACTIVITIES 2,785,997 (2,224,904) 15,214,959
------------ ----------- ------------
FINANCING ACTIVITIES:
Net decrease in demand deposits (199,595) 195,978 2,104,588
Net decrease in NOW accounts (732,969) 1,270,594 (8,593,931)
Net increase (decrease) in
savings deposits (1,467,173) (1,265,929) (1,321,883)
Net increase (decrease) in
time deposits (2,138,010) 180,457 (5,886,573)
Net increase (decrease) in
borrowed funds 198,059 155,373 (32,758)
------------ ----------- ------------
NET CASH USED BY FINANCING
ACTIVITIES (4,339,688) 536,473 (13,730,557)
------------ ----------- ------------
Increase (decrease) in cash and
cash equivalents (1,079,768) (472,216) 2,493,636
Cash and Cash equivalents at
January 1 9,190,838 6,348,014 4,072,796
------------ ----------- ------------
Cash and Cash equivalents at
September 30 $ 8,111,070 $ 5,875,798 $ 6,566,432
============ =========== ============
</TABLE>
5
<PAGE> 8
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
UNAUDITED
NOTE 1
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information, and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, the information presented includes all normal and
recurring adjustments considered necessary for a fair presentation of
the interim period results.
NOTE 2
INVESTMENT SECURITIES
The following is a comparative summary of the book values and estimated
market values of investment securities:
<TABLE>
<CAPTION>
SEPT 30, 1997
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $ 10,000 $ 10,000
U.S. Government Agencies 10,321,363 10,698,699
States and political subdivisions 67,552 67,552
Other securities 1,896,635 1,926,445
----------- -----------
$12,295,550 $12,702,696
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1996
BOOK VALUE MARKET VALUE
---------- ------------
<S> <C> <C>
U.S. Treasury $12,007,366 $12,009,420
U.S. Government Agencies 382,363 723,637
States and political subdivisions 104,988 104,988
Other securities 1,394,615 1,432,255
----------- -----------
$13,889,332 $14,270,300
=========== ===========
</TABLE>
6
<PAGE> 9
BRUNSWICK BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
UNAUDITED
NOTE 3
NET LOANS
The composition of net loans is as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ ------------
<S> <C> <C>
Commercial loans $19,310,072 $27,511,401
Real estate loans 31,055,360 25,190,905
Consumer loans 1,362,446 1,111,539
----------- -----------
51,727,878 53,813,845
Less:
Allowance for credit losses 1,286,933 842,103
Unearned income 155,059 117,873
----------- -----------
$50,285,886 $52,853,869
=========== ===========
</TABLE>
NOTE 4
PREMISES AND EQUIPMENT
The major components of premises and equipment are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ -----------
<S> <C> <C>
Land $ 300,705 $ 300,705
Buildings 562,049 562,049
Leasehold improvements 70,137 70,137
Equipment 1,026,101 854,394
---------- ----------
1,958,992 1,787,285
Less accumulated depreciation
and amortization 967,289 862,852
---------- ----------
$ 991,703 $ 924,433
========== ==========
</TABLE>
7
<PAGE> 10
BRUNSWICK BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
September 30, 1997
There were some significant changes in the Corporation's Balance Sheet since
December 31, 1996. The most notable was a reduction in foreclosed real estate of
approximately $3,505,000. This resulted from the sale of a commercial property
and leaves only one residential property which will be sold in the near future.
There was a $4,700,000 increase in Federal funds sold, however, securities and
loans decreased by $4,162,000.
Deposits decreased by approximately $4,538,000 mostly because of decreases in
public funds interest bearing balances.
Also noteworthy is an increase of approximately $445,000 in the allowance for
credit losses which resulted mainly from $435,000 in credit loss provisions. At
September 30, 1997, the allowance for credit losses represented 2.5% of total
loans and 29.2% of past due and nonaccrual loans.
The results of operations for the first three quarters of 1997, compared to the
same period of 1996, show a decrease in income before taxes of approximately
$32,000. The positive components of this decrease are increases in net interest
income and non-interest income of $485,000 and $58,000, respectively. On the
negative side, non-interest expenses increased by $489,000 and there was an
$85,000 increase in the provision for credit losses. The increase in net
interest income is analyzed in detail on page 9.
Service fee income increases by $113,000. Service fees on deposit accounts
increased by $55,000 while, because of increase in charge card related fees,
other service fees increase by $58,000.
The $56,000 of other non-interest income reported for the first three quarters
of 1996 represents rental income on properties acquired through foreclosure net
of applicable expenses. During the first three quarters of 1997 expenses
exceeded rental income and the resulting net expenses is included in other
non-interest expenses for that period.
Salaries and wages decreased by $85,000 because of reductions to staff, and
occupancy expenses increased by $42,000 because of major renovations at one of
our branch locations.
Other non-interest expenses increased by $514,000 mainly because of a $399,000
loss incurred from the above mentioned sale of foreclosed real estate.
The Corporation's capital position continues to be one of its strong points. At
September 30, 1997 our total risk-based capital ratios was 32.1% which is well
above the minimum regulatory guideline.
In Management's opinion, the Corporation's liquidity position is strong, based
on its high level of core deposits, the stability of its other funding sources
and the support provided by its capital base.
8
<PAGE> 11
BRUNSWICK BANCORP AND SUBSIDIARIES
ANALYSIS OF CHANGES IN NET INTEREST INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
Increase (Decrease) Due to Changes in
Volume Rates Total
------ ----- -----
<S> <C> <C> <C>
Nine Months Ended September 30, 1997
Versus
Nine Months Ended September 30, 1996
Interest income on:
Loans $ 251 $ 164 $ 415
Investment securities 76 74 150
Federal funds sold (93) 7 (86)
----- ----- -----
Total interest income 234 245 479
----- ----- -----
Interest expense on:
Deposits 25 (31) (6)
Borrowed funds -- -- --
----- ----- -----
Total interest expense 25 (31) (6)
----- ----- -----
Net interest income $ 209 $ 276 $ 485
===== ===== =====
Quarter Ended September 30, 1997
Versus
Quarter Ended September 30, 1996
Interest income on:
Loans ($ 25) $ 123 $ 98
Investment securities 25 44 69
Federal funds sold 11 15 26
----- ----- -----
Total interest income 11 182 193
----- ----- -----
Interest expense on:
Deposits 4 (11) (7)
Borrowed funds -- -- --
----- ----- -----
Total interest expense 4 (11) (7)
----- ----- -----
Net interest income $ 7 $ 193 $ 200
===== ===== =====
</TABLE>
9
<PAGE> 12
BRUNSWICK BANCORP AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
The Corporation filed no Form 8-K during the nine month period ended
September 30, 1997.
10
<PAGE> 13
BRUNSWICK BANCORP AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
BRUNSWICK BANCORP AND SUBSIDIARIES
10/20/97 /s/ Carmen J. Gumina
------------- -----------------------------
Date Carmen J. Gumina
President
10/20/97 /s/ Thomas Fornale
------------- -----------------------------
Date Thomas Fornale
Treasurer
11
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 8,111,070
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 24,800,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 12,295,550
<INVESTMENTS-MARKET> 12,702,696
<LOANS> 51,572,819
<ALLOWANCE> 1,286,933
<TOTAL-ASSETS> 97,557,922
<DEPOSITS> 77,260,382
<SHORT-TERM> 500,000
<LIABILITIES-OTHER> 680,679
<LONG-TERM> 0
0
0
<COMMON> 1,443,840
<OTHER-SE> 17,673,021
<TOTAL-LIABILITIES-AND-EQUITY> 97,557,922
<INTEREST-LOAN> 4,207,030
<INTEREST-INVEST> 796,331
<INTEREST-OTHER> 779,785
<INTEREST-TOTAL> 5,783,146
<INTEREST-DEPOSIT> 1,472,021
<INTEREST-EXPENSE> 1,482,483
<INTEREST-INCOME-NET> 4,300,663
<LOAN-LOSSES> 435,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,637,392
<INCOME-PRETAX> 880,811
<INCOME-PRE-EXTRAORDINARY> 471,452
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 471,452
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 0
<LOANS-NON> 58,039
<LOANS-PAST> 338,401
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 842,103
<CHARGE-OFFS> 40,254
<RECOVERIES> 50,084
<ALLOWANCE-CLOSE> 1,286,933
<ALLOWANCE-DOMESTIC> 1,286,933
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
